Mashreq Q1 net profit surges 57pc

Dubai, April 30, 2013

Mashreq, one of the UAE’s leading financial institutions, has reported a strong first quarter this year with a 57 per cent jump in its net profit which soared to Dh425.3 million ($111.5 million) compared to Dh270.8 million for the same period last year.

The total operating income for the bank during first quarter was reported at Dh1.12 billion, representing a 19.2 per cent increase relative to Q1 2012 driven by a 10.5 per cent increase in net interest income and a 26.9 per cent increase in net fee and commission, investment income and other income.

Mashreq’s best in class Fee & Other Income to Operating Income ratio increased further to reach 56.5 per cent in the first quarter of 2013.

The loans & advances grew over the last quarter by 3.2 per cent to reach Dh42.7 billion as of March 2013, compared to Dh41.4 billion at the end of 2012.

In line with the growth in Loans & Advances, Mashreq increased its Customer Deposits base leading to a 3.6 per cent increase from December 2012, reaching Dh49.2 billion.

Mashreq continues to maintain a robust loan-to-deposit ratio, which stood at 87 per cent as of 31st March 2013. Liquid Assets to Total Assets stood at 27 per cent with Cash and balances with Central banks and Dues from banks at Dh20.7 billion as of 31st March 2013.

Mashreq provisions for loans & advances continued to decrease by 2.8 per cent to Dh170.7 million for the first three months of 2013 from Dh175.6 million for the same period in 2012. The efficiency ratio remained healthy at 43.5 per cent.

General and Administrative expenses for the first quarter reported Dh486.6 million, constituting an increase of 6.6 per cent as compared to March 2012.

Commenting on the results, CEO Abdul Aziz Al Ghurair said, "Our Q1 results are impressive, not only because of the strong numbers we have reported, but also because they demonstrably underscore the fact that our business strategy is working and is sustainable."

"Following on from last year’s YOY growth of 60 per cent in net profits, this quarter’s results have re-energized our teams and they believe that if we continue to execute well, this year’s performance may well turn out to be very respectable indeed," stated Al Ghurair.

The Bank’s capital adequacy remained high at 18.9 per cent as well as the tier 1 capital ratio was maintained at a robust level of 16.9 per cent.

“We have focused on customer needs, and endeavored to deliver superior service. We are confident that this strategy will help us achieve further growth. Mashreq has invested in transformed processes, in cutting edge systems, and in a team of motivated people that allows us to offer superior financial solutions that exceed the expectations of our customers,” said Al Ghurair.

Earnings per Share for the publicly listed bank for the first quarter of 2013 are up 57.0 per cent, at Dh2.52, relative to the Dh1.60 for the same period of 2012, he added.-TradeArabia News Service